Seán Power (Kildare South, Fianna Fail)

The Commission for Energy Regulation has statutory responsibility for the regulation of electricity prices under the Electricity Regulation Act. In 2006 the CER ended the regulation of ESB tariffs for large energy users. Some 90% of business has now switched to independent suppliers. The CER has made clear that it intends to exit from the regulation of ESB retail prices when sufficient competition has taken hold in the domestic market. This is in line with overall EU requirements for the internal energy market.

I welcome the fact that the benefits of competition in electricity supply, which have previously been confined to large industrial and commercial customers, are finally available to domestic consumers. The entry into the domestic electricity market of two new suppliers, Airtricity and Bord Gáis Energy, demonstrates that Government and regulatory policy to encourage competition in electricity generation and supply is paying dividends for consumers.

The independent suppliers are offering discounts of between 10% and 14% on ESB tariffs. These discounts will apply even after the 10% reduction to ESB prices now proposed by the Commission for Energy Regulation. Customers will then be able to avail of reductions of up to 24% on current ESB tariffs.

The independent suppliers are also offering domestic consumers fresh choices, such as the proportion of renewable electricity they purchase, as well as alternative billing arrangements.

In recent weeks, domestic customers have been switching to the independent suppliers in unprecedented numbers. However, it is important to remember there are close to 2 million domestic electricity customers and that ESB still retains some 95% of the market share.

The regulation of ESB tariffs will only continue until competition has taken firm hold in the market. Energy price regulation is designed to ensure that a dominant player cannot engage in uncompetitive, short-term pricing practices, which could undermine or drive out emerging competition. The CER will continue to review overall energy tariff structures over the coming months taking account of global fuel prices, the importance of regulatory and market certainty for the energy sector, and the competitiveness challenges facing industry.

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